Florida's public counsel sees threat in FPL rate-case 'settlement'

Talking With …

12:33 p.m. EST, November 4, 2012

J.R. Kelly has served since 2007 as public counsel in the Florida Office of Public Counsel. Among its functions, the office challenges rate hikes sought by electric utilities regulated by the state Public Service Commission. Kelly, 54, is a graduate of Florida State University's law school. He spoke with Sentinel staff writer Kevin Spear about a rate-hike proposal that could undermine his office's effectiveness.

CFB: What does the Florida Office of Public Counsel do?

We are an arm of the Legislature and, in effect, we are responsible for representing the citizens of the state of Florida in proceedings that come before the Florida Public Service Commission. We don't represent people individually; we represent people collectively, such as when a utility files for a rate increase.

CFB: Why do we, the people, need it?

When an electric utility files a big rate case, they have a battery of attorneys, consultants, etc., that are going to fight on the utility's behalf. When the Legislature created our office, they recognized that the only way to make the system fair was to have a legal representative for the citizens that is as least as skillful and knowledgeable as the utility lawyers, so that the ratepayer would get a fair shake in front of the Florida Public Service Commission.

CFB: Florida Power & Light Co., the state's biggest utility, wants approval for a rate hike from the PSC. You recently took the rare step of asking the state Supreme Court to intervene in the case. What's going on?

Florida Power & Light filed a petition for a rate increase back in March. We intervened in the case and went through our normal discovery, asking literally hundreds of questions and asking for thousands of pages of documents. Then, three working days prior to the hearing, FPL filed a purported "settlement" that they entered into with three intervenors — a hospital group, an industrial-power users group and the military bases. We are asking the Supreme Court to prohibit the PSC from considering this purported settlement because, one, we are opposed to it and did not sign onto it, and, two, we believe that it is improper for the commission to consider issues in the purported settlement because they were not part of the original filing.

CFB: What's wrong with the settlement?

It should be considered as part of a whole, new petition for a rate increase. These three intervenors represent less than 1 percent of Florida Power & Light's customers, and are getting some goodies in the settlement. There will be a rate shift that would go mostly onto the backs of residential ratepayers.

CFB: How should this be resolved?

The settlement should have been denied early on and the case should be decided on the merits of the evidence that had been presented. The case was litigated, briefed, there was extensive discovery, and witnesses were provided by all parties.

Assume the Supreme Court denies our petition and the Public Service Commission approves the settlement; the question becomes, what is the role of the Office of the Public Counsel? If we are the statutory representative of all ratepayers, and our voice can be basically suffocated by virtue of a utility entering into a settlement with less than 1 percent of its customers, what's to prevent other utilities from doing the same from here on out? Why wouldn't they want to do that?

CFB: Why is this happening?

I can certainly see where the three signatories in the purported settlement are getting some major concessions with their rates that they otherwise would not have received in the case, because this is not part of Florida Power & Light's original filing.

CFB: Why has the PSC allowed FPL's case to unfold this way?

We're at a loss. We believe this purported settlement obviously introduced new evidence into this case. Therefore, it should be considered a new filing. But the Public Service Commission is just rushing to get this done.